Allowability of Costs

Federal guidelines outline what types of costs are allowable (able to be charged to a grant or contract), and those that are unallowable (those that cannot be charged.)

All expenses charged to sponsored accounts must:

  • Be allowable. Allowable expenses are reasonable and necessary to carry out the aims and goals of the project. Allowable expenses must be treated consistently and conform to any limitations or exclusions set forth in the relevant federal regulations (if applicable), the sponsored agreement, and the University policy.
  • Be allocable. An expense is allocable if it is incurred solely to advance the work under the agreement or if it benefits both the sponsored agreement and other work of the institution, in proportions that can be approximated through use of reasonable methods.
  • Be reasonable. A reasonable cost is one that a prudent person would have incurred under the circumstances prevailing when the purchase was made.
  • Be consistently treated. Costs incurred for the same purpose, in like circumstances, must be treated consistently as either a direct or Facilities & Administrative (F&A) costs.

Costs incurred for common or joint objectives which cannot be identified specifically with a particular sponsored project should be treated as indirect costs. Examples include the cost of utilities, maintenance and operation, building and equipment use expenses, administrative costs, library costs, and student service costs. Most sponsored agreements include a percentage of the direct cost to cover these charges. This percentage is known as the Facilities and Administration rate (F&A) or the Indirect Cost rate.

If your award allows pre-award spending (not all do), then charges within the 90-day period before the start date of the award are allowable, but charges that are outside of that period are unallowable. If the award does not come in within 90 days, the school/center will need to cover the costs. In the same way, the charges that are outside of the award period of performance will also become the school/center responsibility.

Allowable and Unallowable Costs on Federal Awards

Item Typically Allowable as a Direct Cost to a Sponsored Award? Prior Written Approval required from agency?
Administrative salaries

2 CFR 200.413(c)

Yes, provided they are integral* to the project’s objectives. Examples: large, complex programs, such as program projects; projects with complex project management requirements, e.g., managing multiple subawards; projects that require making travel and meeting arrangements for large numbers of participants, such as conferences Yes, the budget justification must explain integral nature of services to the project

2 CFR 200.423

Unallowable as an entertainment expense.

Allowable if necessary to the aim and scope of the project with prior sponsor approval


2 CFR 200.453

Allowable for the acquisition, care, and use of experimental animals, contingent upon compliance with the applicable requirements of the Tufts Institutional animal Care and Use Committee (IACUC)  
Books and Journals

2 CFR 200.454

Generally, should be provided as part of normal library services and treated as F&A costs. May be direct charged if it is needed so often that a library copy is not sufficient. Explanation should be documented and address the following:

• Is the subject matter of the book or journal related directly to the project?

• Is the book or journal associated with a specific research technique that will introduce efficiencies to the research and/or improve the quality of the results?

• Can the book or journal be associated with the sponsored project with a high degree of accuracy?

Communication Expenses

2 CFR 200 App II

Expenses that are used primarily for that project may be charged as a direct expense. Examples:

• Itemized long distance telephone charges for communication related specifically to the project

• Communication devices used exclusively for conducting surveys

• Telephones and PDAs used exclusively to manage a multi-site research project

• Dedicated telephone lines set up to receive data feeds from the field

• Hotel Internet fees during travel related to the project

No. However explain and document why the specialized communication cost is necessary for the performance of the project. If the expense is anticipated, include it in your budget at the proposal stage
Compensation – Additional

2 CFR 200-430,440

Additional compensation can be paid if it is not for work already required in the normal course of employee’s job, and compensation amount is reasonable No

2 CFR 200.453,

Items may be purchased if essential and use is clearly allocable to the project. No, but budget justification should explain the essential & allocable nature of the devices to the project

2 CFR 200.432

Yes, if event’s primary purpose is the dissemination of technical information. No
Consultant/Professional Services

2 CFR 200.459

Yes budget justification should explain essential and allocable nature to the project No
Donor Costs/ Subject Payments

2 CFR 200.453

Allowable for payment to volunteers or research subjects who contribute  to the project Yes
Dues or Membership Fees 2 CFR 200.452 Can be charged to a grant if required for conference attendance or if it reduces the overall cost of attending. Yes
Entertainment Costs

2 CFR 200.438

No, unless the cost is specific and has programmatic purpose to the project Yes, budget justification must explain the programmatic purpose

2 CFR 200.33, 200.439, 200.452

Yes. Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have prior written approval. Yes, equipment over $5,000 must be itemized in the budget justification
Exchange Rates

2 CFR 200.440

Yes, subject to the availability of funds No, unless the rate fluctuation results in the need for additional funding or the increased costs result in a change in the Scope of Work
Fringe Benefits

2 CFR 200.431

Allowable as part of overall compensation to employees in proportion to the relative amount of time/effort devoted by the employees. Must be consistent with university policy No

2 CFR 200.447

Insurance is treated as an F&A cost  
Local Meals

2 CFR 200.438

Yes, if costs have a programmatic purpose. Document the purpose of the meeting and why a meal is necessary. Retain a copy of the formal agenda and a list of external and internal attendees No
Local Parking

2 CFR 200.473

Yes, if it benefits the project directly and there is a clear and reasonable business case No
Memberships, subscriptions and Professional Activity No, generally unallowable as a direct cost except when necessary to meet the technical requirements of the award or to ensure distribution of technical information / publish research results  
Maintenance & Repairs

2 CFR 200.452

Maintenance & repairs needed for equipment being used during the period of performance of a sponsored project may be allowable Yes, budget justification must explain the programmatic purpose
Moving and Relocation Costs

2 CFR 200.464

Yes, if the proposal indicates that Tufts intends to hire a named individual who is essential to the project on a fulltime basis for a continuous period of 12 months. Unallowable if there was no indication in the proposal that the University intended to hire the individual.

Yes, approved in the proposal
Office supplies

2 CFR 200.453

No, general office supplies that benefit common or joint departmental activities are normally not allowable as a direct charge. Specialized supplies may be charged as a direct cost if the use of the supply specifically and solely benefits the sponsored project  
Participant Support Costs

2 CFR 200.456

Stipends, subsistence, travel, registration fees, etc.  for participants** in conjunction with a conference or training. Not allowable on research projects without an education or outreach component Yes
Publication & Printing

2 CFR 200.461

Yes, publication costs can be charged even if incurred after the end of the performance period but before closeout No
Recruiting Expenses

2 CFR 200.463

Can be charged for all candidates if recruitment is essential to and directly related to the project Yes, budget justification must explain the programmatic purpose
Sabbatical Leave

2 CFR 200.431

At Tufts University, sabbatical leave salary costs are included as a component of the University’s fringe benefit rate and cannot be charged again as a direct cost to a grant  
Salaries and Wages

2 CFR 200.430

Compensation for personnel services, including fringe benefits, paid currently or accrued by the organization for employee services rendered to the project Yes, budget justification must explain the programmatic purpose
Taxes (including Value Added Tax)

2 CFR 200.470

Yes, except taxes from which exemptions are available, special assessments on land, and federal income tax No
Telephone Cost

2 CFR 200 App II

Phone charges are generally an F&A cost. Toll calls may be a direct cost provided the cost can be specifically identified to a sponsored agreement Yes, budget justification must explain the programmatic purpose
Training & Education Costs

2 CFR 200.472

No, general educational/training costs for employee development are a component of the University’s fringe benefit rate. May be allowable as a direct cost if incurred in support of, and can be associated with the sponsored project with a high degree of accuracy  

2 CFR 200.474

Allowable as a direct cost where such travel will provide direct benefits to the project  
Visas (short term)

2 CFR 200.463

Yes, if critical and necessary for the project. Long-term visa costs are not allowable as direct cost No

*Integral means the services are essential, vital, or fundamental to the project or activity. **Participant is defined as an individual who is the recipient of a service or training provided at a workshop, conference, seminar, symposium or other short-term instructional or information sharing activity funded by a sponsored project. A Tufts University employee may not be a participant.

Links & Resources

CFR PART 200 - Uniform administrative requirements, cost principles, and audit requirements for federal awards